1

Global Coal Industry Trends,From an Australian Perspective

Ken Talbot Chief Executive Officer - Macarthur Coal Limited

6 April 2006

da

a and China

al Trends

arthur Coal Profile

clusions

This material may contain information derived from publicly available sources that have not been independently verified. No representation or warranty is e accuracy, completeness or reliability of that information. Statements contained in this material are or may be forward looking statements, including

ng the possible or assumed future financial performance, production levels , prices, reserves, potential growth of Macarthur Coal Limited, industry growth projections and any estimated company earnings Any such forward looking information involves risks and uncertainties and has been prepared on the

1. India & China – A Perspective

Western Europe11%

Anglo-economies0%

Eastern Europe2%

Russia2%

Latin America2%

China26%

India32%

pan%

gypt2%

Africa5%

Rest17%

… The Minerals/Coal Industry

‘The Map that Changed the World’

By Simon Winchester

Completed by just one man

W Smith – 1 August, 1815

….The Minerals/Coal Industry

Australian Coal Industry

Rich History

covered by Captain Cook, 1770 in a cliff south of Sydney led Coal Cliff)

l Cliff Mine closed in the 1980’s after approximately 100 years of ing

tralia has some rich coal depositsExample – Bowen Basin, Queensland

Australian Coal Industry

2. Global Trends

th of Steel Market to Accelerate

Total World - Crude Steel Production for the period 1995 - 2004

00

00

00

00

00

00

00

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

ROW

China

Other Asia

Taiwan

India

Japan

Other Americas

Brazil

Other Europe

Europe - 15

ing Markets Dependent on Australian Raw Materials

Domestic Resources

Iron Ore Coal

China Weak Strong

India Strong Weak

Brazil Strong Nil

Japan Nil Nil

Korea Nil Nil

Europe Nil Nil

olidation of Ownership

Steel Industry Customers

eg Automobile Industry

Steel

Producers

Global Majors -

Raw Materials

Do Our Customers Want?

onger coke to support larger blast furnace operation

urity of coke and coking coal inputs

g term cost competitive coke through lowering the cost of raw terials inputs

m line

t type ovens being superseded by heat recovery type ovens

cess time – a defining factor

ging Technology

Coke Making Trends cont’d

V’s

ging Technology

wing demand for electricity (China – a great example)

wing demand for oil and gas keeping prices up

nufacturers publicly advising switch from gas to coal

asing Demand for Electricity to Provide a Floor for Thermal Coal

asing International Cost Base

Dragline

Pre-strip

Overburden

Mining Pit

Coal Seam

Surface

challenges that don’t change

Boss, we’re just doing our job

Making room for young people and retaining experience

w challenges

People/skills shortage

Quality of Management

Health and Safety

Management of some contractors

tom line

We still expect innovation

nisations Continuing To Change

3. Macarthur Coal Profile

d of Directorsabella Coal Mine, Queensland

marks of Macarthur Coal

Dominant global supplier of low volatile PCI coal

Consistent Strategy

Production capacity developed ahead of boom

Big exploration program

Substantial growth foreshadowed

Competitive operating cost structure

Strong balance sheet

4. Conclusions

usionsusions

erals boom implies focus on revenues

t of doing business equally important

lb i i l b